Elm Analytics - Supply Chain Risk Digest #11 - April 22 - 28, 2017

BANKRUPTCY

Synthetic Fiber manufacturer Nexis Fibers is in the middle of difficult restructuring negotiations in how to handle its high debts.

LABOR

Workers at Tesla' Fremont, CA assembly plant have filed charges with the National Labor Relations Board accusing the company of illegally surveilling and coercing workers seeking unionization.

Continuing with Tesla, these are tense times at Grohmann Engineering, a maker of automated manufacturing systems. Tesla acquired the company last November to ramp up for the Model 3. The founder left the company in March and Tesla dropped Grohmann's existing clients. Labor tensions rising, Elon Musk intervened, offering higher wages, bonuses and stock options.

Conform Automotive will lay off 49 employees at its Sidney plant near Dayton, Ohio. The cuts are due to loss of customer business.

Michigan is facing a "dire" shortage of tooling industry workers. Per the Center for Automotive Research, there are ..."in excess of 2 million jobs that will not be filled" due to a lack of appropriately skilled talent.

LITIGATION

Mitsubishi Electric pleaded guilty to a bid rigging conspiracy in alternators and ignition coils between 2003 and 2006. The Ontario Superior Court of Justice set a fine of $13.4m.

The U.S. Supreme Court rejected GM's appeal of a lower court's ruling. The ruling exposed the automaker to defective ignition related lawsuits.

MERGERS, VENTURES, ACQUISITIONS

Denso and electronics / ceramics company Ibiden formed an alliance to develop vehicle exhaust systems.

Magna has entered a joint venture with China's Hubei Aviation Precision Machinery (HAPM), a Chinese automotive seating supplier.

DISASTER

Employees evacuated the FCA Toledo Assembly Complex on April 24, 2017 due to a fire.

Kawasaki Tennesee suffered a super-heated aluminum dust fire in a fan system in their Morristown, Tennessee plant.

PLANT CLOSINGS

GM India shut down its Halol factory in Gujarat today. Manufacturing has been consolidated at the Talegaon facility. China's SAIC is likely to take over some plant assets, but did not mention the plant's employees. The workers are protesting through silent fasting. The shutdown comes at a time where Suzuki, Hero, Honda and Ford are opening operations in Gujarat.

GM let go almost 2,700 staff at its Venezuelan subsidiary this week. The plant was seized by the government April 20th. Workers say that before the seizure, GM had been dismantling the plant, which had not produced a car since the beginning of 2016 due to shortages of parts and strict currency controls.

PLANT OPENINGS

Editor: There have been an unprecedented number of plant openings this past week...

Flex-N-Gate has broken ground on its new $95 million plant in Detroit. The 186-acre industrial park it is a part of has sat vacant for nearly 15 years. 

Volvo is on track to complete its $500 million factory in South Carolina in time to produce S60 sedans for the global market by fall 2018, but they are still building its local supplier base to support the facility.

Mitsubishi Motors has opened a new $565 million factory in Indonesia that will employ 3,000 workers and produce 160,000 vehicles a year at full capacity.

Braidy Industries will build a 2.5m sf plant in South Shore, Kentucky to produce 370,000 tons of aluminum. The plant is to target the automakers who are using more sheet aluminum in their designs.

India's Warm Group will open Selma Precision Technologies to forge auto-parts after purchasing it. The North Carolina plant, previously Sona Precision Forge, closed a year ago.

Panasonic has opened a new automotive lithium-ion battery factory in Dalian, China. This is their first automotive battery cell production site in China, but they plan to establish more production sites in Japan, the US, and China.

PLANT EXPANSION

US Farathane will expand its warehouse and production space in Port Huron, Michigan.

Japan's Topre America Corp will expand its manufacturing facility in Smyrna, Tennessee. Topre America provides automotive stamping and body structure assemblies for Nissan, Honda and Toyota.

REGULATION

President Trump told the leaders of Mexico and Canada on Wednesday that he would not immediately move to terminate NAFTA. This hours after an administration official said he was likely to sign an order that would begin the process of pulling the United States out of the deal.